Bharat Heavy Electricals Ltd, the public sector heavy electrical equipment company, is entering the coal washeries business as part of its diversification programme. It is negotiating with a specialist in the area, a South African company, to set up the washeries. One of these will be built at the Wardha Valley coalfield of Western Coalfields Ltd, a subsidiary of Coal India Ltd.

Bhel has identified coal washeries as one of the thrust areas for diversification, the other three areas being supply of equipment and systems for material handling at ports, waste management, and urban mass transportation. Bhel''s entry into coal washeries is a precursor to its setting up captive power plants based on fuel rejects from washeries.

The company hopes to meet the entire cost of the diversification programme with marginal investments and utilising its existing resources and manufacturing facilities. The diversification plan coincides with the company''s Rs 1,200-crore modernisation programme that stretches over a three-year period. Two of the company''s oldest plants -- at Bhopal in Madhya Pradesh and Trichy in Tamil Nadu -- will be modernised in the first phase.

The company will not, however, move away from its area of core competence, asserts chairman and managing director K.G. Ramachandran. He is, however, skeptical about the tardy implementation of power projects in the country, which has adversely affected the prospects of equipment manufacturing companies like Bhel. As much as 65 per cent of Bhel''s annual turnover of Rs 7,100 crore comes from its core business.

Bhel''s product range covers an entire spectrum of electrical equipment with applications in the power, industry, transmission, transportation, defence, telecommunications and oil sectors. The company has collaboration arrangements with world majors like General Electric, Babcock, and Combustion Engineering.